Five Forms of Software Escrow Agreements

The most basic and fundamental software escrow agreement is the standard three party agreement. This type of agreement is entered into by a software escrow agent (EscrowTech), a software vendor and a licensee. A standard three party agreement is perfect for a situation where a single licensee is requesting a software escrow however the software vendor does not want to set up an escrow for their other customers.

The next type of escrow is a multiple party agreement. This allows for a software vendor to set up an escrow and register one more licensees to their escrow. This allows for a software vendor to keep a single escrow account for all of their licensees. This greatly reduces the amount of time it takes to manage an escrow and significantly reduces the escrow’s cost.

The next type of escrow is for multiple licensees spread across multiple software products. Instead of managing multiple escrows this type of escrow allows you to have one central agreement to manage everything. Like before this greatly lowers the amount of time spent managing an escrow and their associated costs.

Some licensees need something more flexible. In this situation a licensee creates an escrow account that allows for multiple software vendors to register. Each software vendor is given a separate space in an escrow vault and can submit escrow materials for the licensee. This is a great way for a licensee to organize all of its escrow accounts.

The next type of escrow is a minimum service escrow. This type of escrow allows for a software vendor to create a multiple party escrow without paying a licensee fee for each licensee. The trade off is that the licensee does not receive notification from EscrowTech and can be removed or added to the escrow by the software vendor without notification. Depending on your situation and the level of protection your licensees need, this type of escrow might meet your needs.